Gas Stations Prefer Cash Over Credit

As gas prices continue to rise, seemingly to no end, gas stations are beginning to favor cash over credit, offering incentives to customers who ditch the plastic.

The reason behind this phenomenon is that gas stations, like any other merchant, must pay an interchange fee every time someone fills up, and as gas prices rise, these fees rise proportionally.

This fee is typically about 2.50% of each transaction, and now that gas costs nearly $100 per fill up for many cars, gas stations are getting hit hard.

While these fees are typically passed on to the consumer, the owners of gas stations are struggling with rising prices, and thus attempting to keep prices as low as possible despite the extra hit to stay competitive.

So instead of raising prices to compensate for the higher interchange fees, gas stations are offering lower prices for consumers who pay with cash.

I’ve seen this in action over the past few days, with the signs that list gas prices now accompanied by a large “CASH” sign next to them.

And so no longer is the price the same for cash or credit, instead, it’s becoming markedly cheaper for those willing to pay in cash.

It’s not live at all gas stations, but it’s certainly become a more common occurrence, and one that will ideally bring the issue of pricey interchange fees to light.

(photo: nalilo)

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